% % %
10-YEAR CHANGE +32.7% +93.1%
WEEKLY RENT
SALES PRICE
GROSS YIELD
2010 2020
£314
£258,865
6.3%
£417
£499,863
4.8%
+37.3% +99.0%
£318
£251,816
6.6%
£437
£501,126
4.4%
£
£ £
£
£ £
Talk of the private landlord being an outdated model is exaggerated.
Britain's love affair with property has never gone away, it's just a longer-term
relationship now. Short-term challenges can, and normally are, outweighed
by long-term potential gain.
History lesson
Uncertainty is a buzzword that has
been floating around London's residential
markets for a number of years. Increased
property taxes and a potential rise in
interest rates could be enough to steer
potential investors into other investment
classes, but history shows us that it's at
times like these that some of the best
opportunities can be found.
A parallel
Over 10 years ago, there was a similarly
subdued sentiment. While the
circumstances were different, with the
world emerging from the Global Financial
Crisis rather than a pandemic, there was
much caution and uncertainty around
investing in the London property market.
However, those who did commit haven't
regretted it. They have seen their investments
rise by an average of 78% (59% net of inflation);
and by much more in some locations (ONS).
Why now?
As London continues to adapt to the
pandemic, the next few years are likely to
present opportunities. Looking over
the past ten years, growth in the London
market outpaced the UK residential market
and showed significantly better performance
than both the FTSE 100 and gold. As the
landscape of Buy to Let continues to evolve,
investors need to be flexible and take
a medium to long-term view.
Although we have seen a small rise in the base
rate, mortgage interest rates are still historically
low. 5-year fixed-rate buy-to-let mortgages
are still available at less than 2% interest rates.
Why London?
For the ninth consecutive year, London has
been rated the world's most 'magnetic' city,
based on its ability to attract people, capital
and global businesses (Weforum 2020). It was
also voted the No. 1 student city in the world
by QS World Student Rankings (2021).
Economic, social and political stability, together
with world-leading universities and healthcare
system, lie at the core of the UK's popularity
with both domestic and international investors.
SPOTTING AN
OPPORTUNITY
A 10-YEAR PARALLEL
A LONG-TERM RELATIONSHIP
2 London Lettings Report Winter 2022 | PRS
HACKNEY
10 years ago, investors found attractive
yields in Hackney and Stoke Newington.
They have since seen rents and sales price
growth exceed London averages. Today,
better yields can be found elsewhere.
STOKE NEWINGTON